Francesca’s Holdings Corp., parent company of specialty retailer Francesca’s, reported a net income of $10.3 million in Q2 2014, declining from $14.6 million in Q2 2013. In response, the company lowered its sales outlook for FY 2014.
Net sales grew 9% to $97.3 million, driven by revenue from the 90 new boutiques opened since the end of Q2 2013. Total apparel sales and accessories sales increased 14% each, with gift sales increasing 25%. The gains were offset by a 12% decrease in jewelry sales. Year over year comparable store sales dipped 7%.
“We are making progress in reversing the negative trends in jewelry as reflected in improved performance of new merchandise in late July and August,” said Neill Davis, CEO and President of Francesca’s. “We expect the improving sales trend that started at the end of the second quarter to continue through the third quarter as jewelry sales continue to strengthen and our customers increasingly respond to our seasonal gift and apparel assortments. Our balance sheet remains strong giving us the ability to continue to open new boutiques, which are meeting our expectations of paybacks under one year while investing in the infrastructure to support our growth.”
Advertisement
Francesca’s issued guidance for the rest of 2014, modifying expected per-share earnings for the year to range from $0.88 to $0.98 on net sales of $373 million to $383 million. The company had previously forecast per-share earnings to range from $1.05 to $1.17 on net sales of $387 million to $399 million.
